General Scheme of Public Sector Standards Bill 2015: Pre-legislative Scrutiny

I remind members to ensure their mobile telephones are switched off. If they are not, it causes serious problems for the broadcasting, editorial and sound staff.

In this session we commence our pre-legislative scrutiny of the draft scheme of the Public Sector Standards Bill. The purpose of the Bill is to reform the current legislative framework governing the disclosure of interests and other ethical obligations for public officials. I welcome from the Department of Public Expenditure and Reform Mr. William Beausang, assistant secretary of the Government reform unit, Ms Evelyn O'Connor, principal officer, and Mr. Kieran Sheedy, assistant principal. The discussion will begin with Mr. Beausang's opening statement, after which there will be a question and answer session.

Mr. William Beausang

I will give a brief overview of the intended policy approach reflected in the general scheme that has been circulated to the committee. I thank the committee for the opportunity to present the proposed public sector standards legislation.

As set out in the Minister's letter of 18 June 2015 to the Chairman of the committee, the Statement of Government Priorities 2014-2016 included a commitment to publish legislation to consolidate local and national ethics requirements and to give effect to the recommendations of the tribunals. At its meeting of 16 June 2015, the Government approved the drafting of the Public Sector Standards Bill on the basis of the general scheme of the Bill that has been circulated. In addition to the general scheme, a policy assessment of the proposals has been published on the Department's website and has been provided to the committee. It is intended to assist the committee in its scrutiny of the proposals contained in the general scheme. It is also intended to act as a basis, under the open government partnership for public consultation with civil society and other bodies, in looking at the proposed reform legislative model for disclosure of interest and the management of actual and perceived conflicts of interest for public officials.

The context of the Bill is that an effective framework of standards for public officials is integral to the quality and efficacy of public governance. Addressing corruption risks through an appropriate disclosure of interests regime and the regulation of conflicts of interests are critical to maintaining trust in, and the reputation of, public institutions. International and national research highlights the important linkages between the quality of public institutions and long-term economic and social sustainability. The committee will recall that the Mahon tribunal highlighted in 2012 the need for a far-reaching overhaul of Ireland's ethics regime.

Against this backdrop and in the context of the Department's review of the existing legislative framework, a number of areas for improvement were identified in the course of our work. For example, the existing statutory provisions for ethics were developed piecemeal, over time, and set out different requirements at national and local level. The current legislation does not set out a clear set of statutory principles to help underpin ethical conduct of public officials, such as the Nolan principles in the United Kingdom. There is also a need for a more efficient and dynamic system of compliance and compliance monitoring. Another issue is that responsibilities for the provision of advice and for the development of guidelines and codes of conduct are distributed among a number of different bodies, which can make it difficult across the public sector to ensure that a consistent approach applies. Moreover, a strengthening in the level of knowledge and understanding of specific obligations among public officials would be desirable. There is clear scope to enhance and strengthen the institutional framework for the overview and oversight of ethics requirements.

In light of these factors and the other issues identified in the Minister's policy assessment, the objectives of the Bill in overall terms are as follows: to modernise, simplify and streamline the current legislative framework; to put in place a consistent, coherent and proportionate framework for all public officials at both local and national level which is appropriately calibrated to conflict of interest and corruption risks; to introduce a model that corresponds to international best practice that is appropriately balanced with other important public policy objectives, including safeguarding the constitutional right to privacy that citizens enjoy and encouraging participation in public life; to ensure that the institutional framework for oversight, investigation and enforcement of contraventions of the legislation is robust and effective; to respond to the Mahon tribunal recommendations and thereby strengthen public trust in public administration.

In common with other significant legislative initiatives brought forward by the Minister, such as the Regulation of Lobbying Act, the Freedom of Information Act and the Protected Disclosures Act, there are some very substantial reforms included in these proposals. It is proposed to replace the Standards in Public Office Commission with a single public sector standards commissioner. In that regard, the commissioner will have increased powers and, supported by a deputy commissioner who will be independent in terms of their investigative functions, will implement what is intended to be a more streamlined and improved complaints and investigations procedure.

The commissioner will have stronger powers of sanction and enforcement when contraventions take place, as well as a broader role in the provision of advice and guidance. As I have already stated, the proposed legislation sets out a series of overarching integrity principles, which will apply to all public officials, and provides a framework for the revision, updating and improvement of codes of standard and behaviour for different categories of public official.

The proposed legislation strengthens the legal obligation for public officials to disclose, as a matter of routine, actual and potential conflicts of interest that arise in the context of the performance of their duties. It also intends to establish a more effective, streamlined and efficient process for the submission of periodic statements of interests. Importantly, it significantly extends the personal and material scope of disclosures for public officials in line with the Mahon recommendations, with uniform definitions applying at national and local level. It adopts a graduated approach to disclosures, whereby declarations of interests of elected public officials and senior administrators are made to the commissioner and, in some instances, published, while private declarable interests such as liabilities over certain thresholds will be disclosed on a confidential basis and will not be published.

The proposed legislation seeks to impose statutory prohibitions on the use of insider information and on the seeking or acceptance by public officials of benefits to further their private interests. It also proposes the establishment of a new statutory board to address potential conflicts of interest for public officials who take up roles in the private sector - the so-called revolving door issue - by merging the outside appointments boards, OABs, for the civil service and local authority systems.

I thank the committee for the opportunity to outline some of the main aspects of the proposed new legislative framework for public sector standards. My colleagues and I are, of course, happy to answer any questions members may have about the proposed approach. We have circulated copies of a presentation which provides more detail on some key aspects of the proposed approach.

I thank Mr. Beausang. When is it envisaged that the proposed legislation will move through the Houses? Is there a legislative timetable at this point?

Mr. William Beausang

The general scheme has been approved for priority drafting. At official level, we are meeting with the Office of the Parliamentary Counsel on Friday to discuss the timetable. The Minister has indicated that he is keen to have the legislation drafted, published and enacted as soon as possible.

Would that mean the autumn?

Mr. William Beausang

Although it does depend on our discussions with the Office of the Parliamentary Counsel, the Minister is clear that, subject to other priorities on the legislative programme, he wants to see a Bill as soon as possible. If we can get work under way during the summer, the autumn would currently be our target.

I am very pleased to see a general scheme for this type of legislation at last. It is long overdue, and Mr. Beausang alluded to some of the reasons for that in his presentation. It is also very necessary.

Head 5, which deals with public declarable interests, states that "[p]ublic declarable interests are the following in any 3 consecutive 4-month periods" and goes on to set out different thresholds, such as "the source of income in excess of €2,600 from any remunerated trade, profession, employment or other occupation." Could Mr. Beausang explain the rationale by which that part has been structured? Different financial thresholds are given, one of which I have just read out. Why was that figure of €2,600 chosen?

Head 5 also refers to "any estate or interest the public official has in land (other than a family home) in excess of €10,000". Why was that figure chosen? How was the figure of €13,000 reached in the next paragraph, which refers to "any beneficial or legal interest or holding in shares or bonds or debentures, or other like investments, in a particular company or other enterprise or undertaking (which does not relate to land or any business of dealing in or developing land) at any time during the appropriate period"? I am curious to know how the officials settled on those benchmarks or limits.

Mr. William Beausang

In most instances, the thresholds were already there in the legislative framework. In terms of the individual thresholds Deputy McDonald has mentioned, my colleague, Ms Evelyn O'Connor, will be able to explain the specific basis for each.

Ms Evelyn O'Connor

The figures are based on Schedule 2 to the Ethics in Public Office Act, 1995, which outlines registrable interests. The figures in the Schedule to the 1995 Act are in punts while the figures in the general scheme have been converted to euro. They are actually representative of the same amounts.

I should also say that the definition in the general scheme of what needs to be declared is based on Schedule 2 to the 1995 Act. We have also examined what is required at local authority level and are merging the two sets of requirements, so that the same standards apply for people at national and at local authority level. It is structured as it is for the sake of simplification, through putting things together. Some aspects, such as requiring the source of the income, came from the Mahon recommendations.

The general scheme refers to "[p]ublic declarable interest [...] in any 3 consecutive 4-month periods." Could the witnesses translate that for me, taking the €2,600 remuneration as an example? Is that income in excess of €2,600 that occurs consecutively on an annual basis - am I reading this correctly?

Mr. William Beausang

That is the annual basis, yes.

Ms Evelyn O'Connor

One of the Mahon recommendations wanted people to look at their income and liabilities every month. We felt that was a little bit excessive so, to go some way towards implementing the Mahon recommendations, we decided that three times a year should be sufficient. A person would begin and would make a declaration. Three months later he or she would have a look and see if there had been a significant change. The person would only have to make a further statement in the case of a significant change.

Mr. William Beausang

If I may cut across Ms O'Connor, the thresholds are annual thresholds.

So the €2,600 is an annual limit. That was not terribly clear from the wording.

Mr. William Beausang

The intention in moving away from the annual declaration, which can get quite out of date over the course of a year, is that persons who are subject to the legislation should make disclosures three times a year. If there is no change in their circumstances which is appropriate for reporting, there is no requirement for return. If there is a change, that information is made available to the regulatory authority on a much more timely basis than heretofore.

Ms Evelyn O'Connor

It will also correspond to the requirements on lobbying, where people have to make returns 21 days after a particular date, so it would be April and every four months after April.

I cited the €5,000 threshold for the supply of goods or services to a public body, where the value of the goods or services "exceeds €5,000 or €5,000 in aggregate". Am I to take it that this figure is also borrowed from the existing provisions?

Ms Evelyn O'Connor

In that particular case it is currently €6,000, and we reduced it to €5,000.

In terms of marrying that with the existing benchmarks, are the witnesses satisfied that it is sufficiently high or low as a threshold?

Mr. William Beausang

We would have taken advice from or been guided by what the Standards in Public Office Commission stated in its annual reports about the effectiveness of the current legislative regime. As much as anything, the path of least resistance-----

Unfortunately, a vote has been called in the Dáil, and the two Deputies-----

We will have other opportunities to go through this.

Yes, of course.

Are we calling in some people next week?

Yes. This is the beginning of the pre-legislative scrutiny process. We will have other opportunities for debate. If members are agreed, I am happy to continue the meeting for a few minutes. I call Deputy Fleming.

We understand it has been a difficult afternoon. Several votes were called in the earlier session and some of us have had to attend the meeting of the Committee of Public Accounts in the meantime. We are being caught all over the place, but I am concerned that the meeting would have to adjourn if the few of us who are here leave.

I have a number of questions, and I thank the witnesses for the ream of documentation sent last week. I will put a straight question to them which they may not be able to answer if it is more to do with policy. Much of this emanates from the Mahon tribunal. In the Mahon report of 2012, serious conclusions were drawn regarding the mobile phone licence and donations to people who were members of the then Government, but since 2012 we have seen very little follow through on that. We were promised that within six weeks of that report each Department would report back to the Taoiseach. Approximately 160 weeks later, there is no sign of that. Is the announcement of this legislation an attempt to cover the fact that nothing happened in the three and a half years since the Mahon report was published? That might be an unfair question to put to the officials.

Mr. William Beausang

I can quote the Minister on that issue because an editorial in The Irish Times of 20 June referred to progress in this area as being painfully slow. In a letter from the Minister to the newspaper, which was published on 24 June, he made the point that he thought the characterisation less than fair on the basis of the series of reforms that had been enacted by the Department of Public Expenditure and Reform since its establishment. In the area of Government reform, I mentioned in my opening statement the Protected Disclosures Act, the Regulation of Lobbying Act, the Freedom of Information Act, extending the scope of freedom of information, expanding the power of the Ombudsman and reforming the system of appointments to State boards. A significant programme of reforms has been delivered.

In terms of the deadline Deputy Fleming mentioned, we recall, being a party to that process, that there was to be a report back to Government, but in terms of looking at it on the official level, it went into the revised programme for Government in July 2014. We had been doing work prior to then, but it was officially endorsed as a Government priority at that time. From an administrative perspective, bringing a general scheme to fruition with the policy paper and the agreement on accelerated drafting is a fast-track approach to getting legislation progressed.

I understand what the Minister is saying in that all those developments happened, but they have nothing to do with dealing with the issues in the Mahon report. Some of those items might be-----

Mr. William Beausang

The Mahon report noted the need to regulate lobbying, and it certainly made reference to whistleblowers. As we know, a broad range of issues were raised in the Mahon report.

I have asked the question and I will move on. I presume we are talking about public bodies. Will the definition of public bodies include commercial semi-state bodies?

Mr. William Beausang

Yes.

So it will include Irish Water, NAMA-----

Mr. William Beausang

Would it be useful to the Deputy if Ms O'Connor brought him through that? It is intended to have a comprehensive scope because there is no point in having public sector standards if there are people sitting outside that framework for public sector standards.

I have the documentation as well, so, in fairness, I will not-----

I would like to hear that. We have the documentation-----

There is a lot.

-----but it is an interesting question.

Mr. William Beausang

Before Ms O'Connor speaks on that point, it is an important issue and the Minister will be interested to hear the Deputy's views on whether that definition is robust. We know from the other legislation we have done on freedom of information, the regulation of lobbying and the powers of the Ombudsman that making sure the definition captures all public bodies can sometimes be difficult.

Ms Evelyn O'Connor

The approach we have taken is to use the definition from the Financial Emergency Measures in the Public Interest Acts and the Public Service Pensions (Single Scheme and other Provisions) Acts. This is to set out the categories of official and the bodies that will be covered by the obligations, and the sanctions in the draft scheme. At head 4 we define the public bodies. We start by outlining a number of them, such as the Civil Service, the Garda Síochána, the permanent Defence Force, local authorities, the Health Service Executive, the Central Bank of Ireland, an education and training board or a higher education institution in receipt of public funds. We then have anybody established by or under an enactment other than the Companies Acts or under the Companies Acts in pursuance of powers conferred by or under another enactment and financed wholly or partly by means of money provided or loans made or guaranteed by a Minister of the Government or the issue of shares held by or on behalf of a Minister of the Government in respect of which a public service pension scheme exists or applies or may be made. We go on to refer to a body that is wholly or partly funded directly or indirectly out of money provided by the Oireachtas or from the Central Fund or the growing produce of that fund and in respect of which a public service pension scheme exists or applies or may be made. We also have any subsidiary of or a company controlled within the meaning given by section 10 of the Taxes Consolidation Act 1997 by a body to which paragraphs (d), (e), (f), (g), (h), (i) or (j) relate and in respect of which a public service pension scheme exists or applies or may be made. We have tried to make it as broad as possible so that it would include civil servants, public servants, non-commercial bodies, commercial bodies, their subsidiaries, teachers, the Defence Forces-----

All the commercial semi-state bodies.

Ms Evelyn O'Connor

The commercial State bodies.

What about the North-South bodies, as in the area of tourism? This has implications for Northern Ireland. I found the loophole. I suspect there might be an issue in our domestic legislation, including-----

Ms Evelyn O'Connor

I suspect that there would be. The Minister also has a right, following consultation with the commissioner, the relevant Ministers, a committee of the Oireachtas, to bring in further bodies or categories of officials by order, should it be decided that there is a need to do so.

So the North-South bodies would be excluded. They are not included.

Ms Evelyn O'Connor

Yes. I do not think it would be right and proper to include-----

That is why I am asking the question. It would not be right or proper because they have a role outside our jurisdiction. I am just teasing this out. The ESB and Eirgrid are included.

Ms Evelyn O'Connor

Yes.

I understand that. What about bodies such as those in the health sector? I refer to the famous sections 38 and 39 organisations. There are 500 section 39 organisations.

Mr. William Beausang

All of those would be captured by the draft provision relating to a body which is wholly or partly funded. We would have used a similar type of definition in the Freedom of Information Act, for example. That has proved successful in bringing those bodies in under FOI, so we would expect it to work in this instance. It would be a big gap in the legislation if they were not covered, so that would be a priority for us.

There is a big schedule of exempted bodies and partially exempted bodies to the Freedom of Information Acts? Will there be such a schedule here?

Mr. William Beausang

In contrast to the freedom of information regime, where the legislative model allows bodies be excluded, the general scheme as currently drafted has no exclusions. It would look a bit odd to be excluding any public body from ethical requirements whereas one can justify, as the Minister has, excluding certain public bodies from the freedom of information regime.

I understand that. On the section 39-type organisations, many other organisations get grants from the Government such as organisations in the voluntary sector. I am sure an element of the Society of St. Vincent de Paul's funding is State funding. I pick it as an example of a big charity but there are many other charities, such as Rape Crisis Network Ireland which provides a national co-ordinating role. It gets some element of its funding through Tusla but it would have a lot of private funding. What of the local sports club which might get an operational grant? Where do we draw the line given the partly funded concept extends to nearly everyone?

Mr. William Beausang

The same issue has arisen in things like the freedom of information regime. There is scope for the Minister to bring anyone in under the freedom of information regime. Part of our work involves examining what criteria might guide that decision-making. In the fullness of time, that same issue will need to be considered as we look at the definition in the legislation which allows the Minister, as Ms O'Connor has mentioned, to make an order bringing other bodies within the ambit of this legislation as is consistent with the principles of transparency and accountability. That is a job of work down the road when the legislation is in place. We will need to assess, as Deputy Fleming said, where is the proper or appropriate boundary between the public sector broadly defined and bodies which would not regard themselves as part of the public sector but benefit significantly from Exchequer funding and whether, in those circumstances, they should be subject to the ethical requirements proposed in this Bill, many of which are currently in force for public officials and elected representatives.

It goes without saying that we agree with the legislation in principle and the co-ordination of local and national approaches because it is very confusing for many people and there are different places to go.

Another issue is that of conflicts of interest. It is not so much the conflict of interest of the public official that is in issue but often it is the one concerned with family and connected persons. Will Mr. Beausang talk us through that issue? A public official could have a brother who happens to run a business and they might not talk at all or they might be the best of friends. Will Mr. Beausang run through who would constitute a connected person? Matters relating to our spouses are not included in some of our declarations but may be in other cases. I forget exactly. Will Mr. Beausang talk me through this issue because it is a thorny one?

Mr. William Beausang

It is a thorny issue and one the Mahon tribunal considered and on which it made recommendations. It is central that this legislation extends significantly the material and the personal scope of disclosures that are required. An important part of our work, when discussing it with the Minister in preparing these legislative proposals, was to determine the appropriate cut-off point for connected persons. What degree of connectedness was appropriate for having a public representative or elected official make a disclosure? The Minister and the Government ultimately came to a conclusion on that matter. It is an issue which is probably quite central to the legislative approach and I am sure there will be further discussion on the Bill in the context of this committee's pre-legislative scrutiny and, indeed, once it is drafted and published.

We were always conscious, as was the Minister, of the balance to be struck between the need for reforming legislation which met the objectives of the Mahon tribunal and ensured constitutional protections of privacy were respected and producing legislation which was not an impediment to participation in public life. As the Minister would have made clear to us and as we would see it ourselves, if public representatives or officials are subject to an excessive degree of scrutiny and disclosure, people will make their own decisions as to whether it is worthwhile notwithstanding their commitment to the public interest. Perhaps Ms O'Connor will outline the definition.

Ms Evelyn O'Connor

I understand Deputy Fleming's point that now, because a stepped regime is being proposed, category A officials, when making their periodic disclosure, will have to disclose not just their own interests but those of the spouse or child where they would have a material influence on the performance of their functions. For other relatives, it would be a case of making ad hoc disclosures. If an actual conflict arises in respect of a relation and the person has knowledge of it, an ad hoc disclosure would be made. However, in the case of relatives, the disclosure would be a private declarable interest rather than being them made in the public domain.

To whom do they make the disclosure?

Ms Evelyn O'Connor

The commissioner.

Spouses and children will fall within the remit but others will not.

Ms Evelyn O'Connor

Yes, where their interests would have a material influence on the person in the performance of his or her functions or the interests could in some way confer a significant benefit, loss or impact on the person.

I will make one further observation. We had this exact same debate during one of the last items of legislation the Minister, Deputy Howlin, brought through. I recommend that principal officers across the public sector should be in category A. Oireachtas Members are on principal officer level salaries. Public officials on the same salary scale as Oireachtas Members should be in the same category. We have pointed out that, when it comes to negotiations on issues in a Department, public bodies or at director of services level in the local authorities, sometimes a manager can be a little hands off and leaves it to his couple of directors and sometimes directors have phenomenal powers and influence, which is more than any Member of the Oireachtas who is not a Minister. People at that salary grade of principal officer should be included in category A. I know we did not bring it in - Mr. Beausang might help me on this point - on the last occasion. I forget which one, there are so many.

Mr. William Beausang

There was the Regulation of Lobbying Act 2015 but, on the basis of Deputy Fleming's contribution, the Minister undertook to do it within a year perhaps or when the legislation came into effect.

It may have been within 12 months. I made this point about principal officers and directors of services. They, in truth, have much more decision-making capacity. They may have to clear it up the line but they are the people driving many decisions. I therefore think they should be included on the same basis. I made the same point the last time and I am delighted someone remembers what I said on that occasion. It is the same point and Mr. Beausang will see there is a consistency in my approach.

The requirement to report three times a year is not proportionate. Once a year might be enough to look at one's finances given it is not everyone's favourite cup of tea. If the news is not good, once a year is more than enough to have to-----

To declare liabilities.

Once a year might be more than enough to depress us - I will put it that way - never mind having to do it three or four times a year. The next question I wish to ask concerns judges. Are they included?

Mr. William Beausang

Judges are not included under this framework, which reflects the separation of powers.

Given a judge made this request and the approach being taken seems to follow Judge Mahon's approach, if it is good enough for a judge to recommend it, it is good enough for judges to be included. Mr. Beausang will say there is the issue of the separation of powers but if judges want to feel they are above it, let them challenge the legislation. That is my view. We are talking about people in decision-making roles.

Think of the decision-making capacity of judges such as Mr. Justice Mahon, Mr. Justice Flood, Mr. Justice Moriarty. The influence that they wield on public life and on setting the agenda for the Oireachtas, as they are doing now, is phenomenal. I do not buy that they should be outside the remit of ethics legislation. We can dance on the pin of separation of powers. I do not ask for Oireachtas oversight. They can have their own commission within the Courts Service or whatever. I would not attempt to encroach on that but the same standards that apply to Oireachtas and other public officials should also apply to judges. The Department has to work on a mechanism to make sure the Oireachtas is not encroaching on them. They are subject to the same taxation laws as we are; they should be subject to the same ethics law-----

Mr. William Beausang

The Minister consulted the Minister for Justice and Equality and she obviously highlighted the Government commitment to the establishment of a statutory judicial council. That was seen to be the forum or the appropriate way of assessing those issues and the standards of conduct that should apply to judges and so on. When the Minister consulted in finalising the memorandum seeking approval for the general scheme, that was agreed to be the proper way to address the point raised by the Deputy.

I am sure if he asked many other people whether they should be excluded, they would find a good reason they should be. I do not buy that. Judges should not be excluded and a mechanism is needed to monitor them independently of the Oireachtas but they should not be excluded from the process. A few minutes ago, everybody was covered by the legislation but now we know cross-Border bodies are not covered and neither are judges.

Mr. William Beausang

While subject to the constitutional position obviously.

I would like to know which other little groups are not covered. In my chit chat with Mr. Beausang, I have found two groups are not covered. Are other groups not included? How have I hit on two groups?

Mr. William Beausang

The two groups the Deputy is talking about are private bodies that might be in receipt of some support from the Exchequer-----

They are cross-Border bodies.

Mr. William Beausang

There is a specific legislative reason for that. We cannot legislate for those bodies but in the scheme of things, it is a comprehensive coverage, as we have outlined when running through the relevant head. I take the Deputy's point. The Judiciary is excluded, as are the North-South bodies, but the policy intention, as I reflect on it, is not to exclude any other significant group. We went through the head and it had a wide coverage. If there are gaps in the coverage, the Minister would be keen to address them in the further development of the legislation.

We are teasing this out. Another issue I am interested in is the new statutory board to address potential conflicts of interest of public officials who take up roles in the private sector by merging with the outside appointments board. What about people who leave the public service and move into areas where there is a potential conflict of interest? I am probably unique in the Oireachtas in that I do not have the same problem with this as other Oireachtas Members who think it is fashionable to have the view that public servants should be subject to a quarantine period. I can think of in the national interest senior officials in the Department of Jobs, Enterprise and Innovation or the IDA or the Department of Agriculture, Food and the Marine going to work for large Irish multinationals that export all over the world. That would be good for Ireland and that is good for business and employment. Somebody might say: "You worked in the Department of Agriculture, Food and the Marine; you should have nothing to do with our biggest agricultural exporter for a quarantine period." There should be a mechanism to make a business case that would set aside a lazy quarantine period. Some members of this committee think there should be a two-year quarantine but Ireland is losing valuable resources. I favour secondment between the public and private sectors rather than continuing to draw demarcation lines. The public sector is good and the private sector is bad and if people work in the public service, they should not contaminate themselves by going into the private sector for 12 months. That is lazy thinking and Mr. Beausang can call me what he likes for having that view but a mechanism is needed whereby senior people who can help Irish business are not excluded from contributing just because they worked in the public service.

Mr. William Beausang

The approach taken in the general scheme corresponds to the type of approach the Deputy outlined. At present, there is a non-statutory board which assesses cases made by officials who are considering moving into the private sector as to whether an approval is needed for senior level staff. The outside appointments board has not seen many cases over recent years but the intention is always to identify where there may be a conflict of interest and introduce a safeguard that addresses the conflict rather than a blanket prohibition on somebody taking up a role. That approach is reflected in head 45, which refers to a scenario where somebody moves to a body with which they have had outside dealings or where there might be an unfair advantage conferred by the public servant moving there. There is a requirement to inform the outside appointments board and the board can either consent unconditionally to the person moving or design conditions to address specific conflict of interest risks that might arise. Countries that have tried to introduce blanket prohibitions found themselves having to pay gardening leave for a period because people have a constitutional right to work. Our legal assessment and our understanding from the Office of the Attorney General is that we cannot say to people that there will be a one-year or a two-year prohibition. It has to be proportionate and it has to be related to the risks. If we try to introduce a prohibition, we will be into a situation where somebody will have to be sent on administrative leave until the conflict of interest risk has eroded.

The commissioner will have stronger powers of sanction. Will Mr. Beausang explain the sanctions? Are they financial penalties? Has that not to be done through a court? I thought courts were the only fora-----

Mr. William Beausang

There is a significant innovation in the legislation in terms of the issue of enforcement. In the presentation we circulated - the Deputy might have an opportunity to have a look at it at some stage - it looks a little complex on the face of it but it is reasonably straightforward. Where there is a contravention of the legislation, the commissioner for public sector standards needs to make an assessment as to whether it is an offence and whether the official has broken the law in the context of possible criminality. In those situations, he or she can refer to the DPP if it is an indictable offence or he or she can prosecute summarily and there is scope for less serious offences for the commissioner to consider issuing a fixed penalty notice. We would expect that to arise in the case of inadvertent non-compliance. When it is not an offence but it is not a minor breach, the innovation in the legislation is that the commissioner can issue civil penalties such as a censure or a warning to the person concerned or orders to rectify. In significant cases, the commissioner can recommend a suspension. In the case of the Oireachtas, that would need to be worked through the Houses of the Oireachtas's internal processes. It is just a recommendation but in the case of a civil servant or a local authority official, a recommendation for a suspension goes back to the head of the office or the city or county manager for further processing. Where there is a contravention but it is not an offence and it is considered a minor, technical breach, the commissioner can provide confidential advice or guidance or refer to the public body for further action.

There is a suite of menus there to strengthen the ability of the regulator to ensure compliance and conformity with the legal requirements in a proportionate way that supports the overall intention that the regulator would be constructive and that given the complexities of the issues the legislation relates to, allows the regulator to engage with people subject to the legislation, provide advice and guidance and assist people in complying with what are objectively quite extensive and, in some instances, stringent requirements.

Does it include people who are engaged by the State or State bodies to do a lot of work and who earn most of their income from State fees? They might be self-employed. I am thinking of senior counsel who probably work for the Director of Public Prosecutions for practically their entire career. They work in different circuits. Effectively, all of their income is paid out of the public purse. GPs get a substantial amount of their income from the medical card fees but might have private practice. There are different types of hospital consultant contracts. Some consultants are fully contracted to the hospital and have no private work while many of the older consultants have private work. Could Mr. Beausang talk me through the raft of people who earn a large proportion of their moneys working as front-line State officials? Are all these people covered?

Mr. William Beausang

As we outlined earlier, the legal definition we have drawn on in developing the legislation is the FEMPI definition of a public official. Contractors and independent practitioners are not subject to the legislation. They are subject to their own professional regulatory systems. Obviously, lawyers-----

What about one overall system? I would ask the Department to reconsider this issue. Technically, a senior counsel who is prosecuting on behalf of the State every day of the week and earning all his money from State fees is a sole trader but he is very much in the public eye and part of the State mechanism. It is the same with a GP. Most of the income of GP practices comes from the State, particularly with the roll-out of the extra medical cards. They are not included and I presume this means that the staff they employ in their health centres through State fees are not included. The last example I gave was consultants. The potential for conflict there is as real as it is in many of the other areas the Department has captured. I know I am spreading it but I am talking about individuals, not companies that tender for work. I said the section 39 people tender for work and the Department is trying to capture them. If the Department is trying to capture section 39 organisations that are substantially funded through State funding and they are contractors rather than employees, I cannot understand why other people who are working on a contractual basis for the State like the three examples I have just given would not be captured. I know everyone will say that they have their own way of doing things. I ask the Department to rethink it.

Mr. William Beausang

Obviously, the purpose of the pre-legislative scrutiny is to hear people's views. I know that the Minister was very keen for us to make the point that the pre-legislative scrutiny of things like the protected disclosures legislation was very useful in helping to develop, refine and improve that legislation. The only comment I will make about the specific issue is that part of the problem with the existing regime is the large number of individuals who are subject to the same requirement in a way that is not proportionate and graduated and does not relate to the conflict of interest risks that are there. In looking at the international evidence and discussing it with the Minister, our assessment was that in a situation where everybody is subject to the same requirements, the ability of the regulatory system to focus on the risk areas and adopt a proportionate approach to where the risk of conflict of interest and corruption is greatest is diminished. There is a balance to be struck in terms of the scope of legislation. We have already referred to the fact that a graduated approach is adopted within the legislation itself. The Deputy already made the point that he is concerned that where the Government has drawn the line is not right in respect of principal officers and other senior officials. An approach has been taken here where there are three categories of public officials. As the Deputy pointed out, those in category A are subject to the most stringent requirements. Those in category B are subject to less stringent requirements, although they are still quite significant. Category C encompasses the generality of public servants who will be subject to important requirements and codes of practice. There is a balance in terms of ensuring that the regulator is not receiving a huge volume of returns and has a huge scope of responsibilities. This means that the regulator cannot be efficient in the way it monitors and oversees the scheme. That is just a general observation in respect of the point raised by the Deputy.

I have four very short observations to make, a number of which occurred to me while Deputy Fleming was speaking. We are all aware that particular consultants who consulted for the Department of Finance in the old days before separation would have derived a significant portion of their income from advising

Departments. I am sure there are plenty of other people in that category. They may not be Government advisers per se but they are consultants to Government Departments and derive a substantial amount of money from being consultants to Government Departments. This should be considered.

In respect of getting one's head around whether one is category A, B, or C, I used to dread having to make these declarations every year, not because I did not want to make them but because I was afraid that I would not declare something I should have declared. Alternatively, it could relate to something one's child or spouse has. People tend to declare all around them because they are afraid they might miss something. One thing in Mr. Beausang's presentation I tried to get my head around is the difference between a category A, B and C declarant. As Deputy Fleming pointed out, category A should possibly contain a category of official that is not included based on equivalence in respect of responsibility and ability to influence decisions. My next question concerns category B officials and how this legislation might change the way people view public service. I am putting this forward from the perspective of a devil's advocate. Is there a danger that we can go so far in making everything so open and transparent that nobody actually wants to do the job? Am I right in saying that it is only category A where individuals declare their private declarable interests, in other words, their shareholdings and the moneys they might have in land or buildings? Am I right in saying that declaring those declarable interests only applies to those in category A?

Mr. William Beausang

The presentation we circulated is our best effort.

I am very conscious of time and am aware that it has been a very long afternoon. Category B declarants make their declaration to their head of organisation or line manager.

Mr. William Beausang

The vice chairman has the presentation so she is working to it.

I can think of many situations where individuals might not be remotely comfortable with making declarations to a line manager. Has the Department allowed for matters of privacy? Where do we draw the line here? I can see that category C officials are intended to be lower down the ladder and their interests relate to matters of integrity, impartiality, objective honesty and so forth.

Their declarations only relate to situations where there could be a perceived or actual conflict of interest and they must make their declarations in those circumstances. However, in regard to category B, they must declare all public declarable interests as per category A. In other words, they must declare any directorships or anything they might be engaged in that would bring about a conflict of interest. I am not clear on exactly what category B includes. Category B includes a substantial number of public officials, senior level officials, directors of public bodies and principal officers, the level Deputy Fleming wanted to include in category A, across the public sector. Can I have a quick and succinct response to the question as to what category A and B are each obliged to declare? We know category C officials are not obliged to declare much.

Ms Evelyn O'Connor

First, head 5 of the Bill sets out the declarable interests and these pretty much mirror the current registerable interests. These interests are the same for categories A and B. It is only the private declarable interests that category B officials do not have to declare. The declaration of those interests applies purely to category A. The private declarable interests are also outlined in head 5. At head 5(3) we set out that the private declarable interests include interests such as the amount of income from each source declared, any individual asset in excess of €50,000, any liability in excess of €50,000 and any gift with a value exceeding €200 given by a person who is not a relative of the public official and is not connected with the performance of his or her functions. There are more interests included in that section.

May I stop Ms O'Connor for a moment? I am asking about public declarable interests. Included among these interests is any beneficial interest in a company worth over €13,000.

Ms Evelyn O'Connor

Yes.

I am thinking of a discussion we had in regard to changing the tax appeals code. Am I correct in understanding from this that somebody in category B would have to make a declaration in regard to any beneficial interest he or a person connected to him had in a company that was worth over €13,000?

Mr. William Beausang

Yes, that is the current position. To go back to the question posed earlier, there are important changes in regard to the material and the personal scope on disclosure. However, my clear recollection is that this declaration is an existing requirement.

I am not arguing what constitutes a public declarable interest. I am talking about the group of people, a very broad category, who will now come within that.

Mr. William Beausang

They are already included.

I am surprised that the public service unions have not had something to say about that, but perhaps they have. I am sure we will hear from them in time.

I will now bring the discussion to a close. I thank Mr. Beausang, Mr. Sheedy and Ms O'Connor for their attendance.

The joint committee adjourned at 6.15 p.m. until 2.30 p.m. on Wednesday, 15 July 2015.